- Fund protection at bookmakers refers to measures taken by bookmakers to safeguard customers' funds.
Fund protection at bookmakers refers to measures taken by bookmakers to safeguard customers’ funds
What Is Fund Protection At Betting Sites?
Bookmaker fund protection refers to the measures put in place by a gambling company to safeguard the funds belonging to its customers. This ensures that customers’ money is protected in the event of the bookmaker’s insolvency or bankruptcy.
The level of protection provided by the bookmaker may vary, and it is important for customers to understand what type of protection is in place for their funds.
Definition of "Customer Funds"
The UK Gambling Commission classifies “customer funds” as the following:
- Money you deposit to your online account
- Any winnings that are due to you or remain in your account
- Any bonus funds to which you are entitled based on the terms and conditions of the promotion.
Note that funds that are currently placed as bets are not classified as customer funds and therefore are not subject to any measures put in place by the gambling company to protect such funds in case of their insolvency.
Gambling companies are authorised to keep your funds in foreign bank accounts, but this will not impact your entitlements. Your funds in the account will be handled in accordance with any safeguards that have been put in place.
Levels of Fund Protection
UK registered gambling businesses offer three levels of protection, as follows:
No Protection
“No protection” means that if the gambling company were to become bankrupt, any funds in your account would be considered as the company’s assets, and you are therefore likely to forfeit those funds.
A betting site’s terms and conditions should make it evident whether or not your funds are safeguarded. Although the exact phrasing may differ depending on the company. A statement indicating that there is no protection is in place could read like this example:
“If the company goes bankrupt, there is no protected segregation in place to safeguard these funds.”
Medium Protection
“Medium protection” means that gambling company has taken steps to safeguard your funds in the event of their insolvency. Various methods may be employed to achieve this, such as securing insurance. Nevertheless, there is no complete assurance that you will recover your funds in the event of the company’s bankruptcy.
A betting site’s terms and conditions should state the medium level of protection afforded to your funds. While the specific language may vary from one company to another, an illustration of such a statement could be as follows:
“Funds belonging to customers are held in separate accounts from those of the business, and measures have been put in place to ensure that assets held in these customer accounts will be distributed to the appropriate customers in the event of the company’s insolvency. This fulfills the requirements set by the Gambling Commission for segregating customer funds at the medium level of protection.”
High Protection
“High protection” means funds belonging to you are held in a distinct account that is legally acknowledged as separate from the business. An independent trustee manages the funds in your account, which are also subjected to review by an external auditor. With the highest level of protection afforded, your likelihood of recovering your funds in the event of the company’s insolvency is maximised.
A betting site’s terms and conditions should make it evident that your funds are safeguarded to a significant degree. While the precise phrasing may vary from one company to another, an illustration of such a statement could be as follows:
“Funds belonging to customers are held in a formal trust account that is distinct from the company’s operations, both legally and in actuality. An independent trustee or external auditor is responsible for verifying and monitoring the account. This setup complies with the Gambling Commission’s criteria for shielding customer funds at the highest level.”
Should I Avoid Sites With Medium or Low Protection?
Choosing to gamble at a website with low protection for customer funds is a personal decision that depends on various factors.
While low protection may mean that the bookmaker is not providing as much protection for customer funds as other websites, it does not necessarily mean that the website is not reputable or trustworthy. Some customers may choose to take the risk of using a website with low protection in exchange for other benefits, such as better odds or more attractive promotions. However, it is crucial to understand that gambling involves risk, and the risk is higher when dealing with a website that has low protection.
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